* Sales volumes grow 0.2 pct from July, 10.1 pct yr/yr
* Building recovery suggests end to interest rate cuts
* Central bank's Wed rate cut seen as end of cycle
SAO PAULO, Oct 11 Retail sales in Brazil grew in
August for the third straight month, underscoring an incipient
economic recovery and reinforcing impressions that the central
bank had finished cutting interest rates.
Sales volumes rose 0.2 percent in August from July
, government statistics agency IBGE said on Thursday,
defying forecasts of a 0.1 percent decline in a Reuters poll.
Robust retail sales have helped Brazil avert a recession in
the past year as manufacturers struggled with weak global
demand, \ and a broad range of government stimulus measures have
further stoked consumer demand since June.
The central bank has lowered borrowing costs to all-time
lows to bolster the economy, including a tenth consecutive
interest rate cut on Wednesday.
In its decision, which most analysts interpreted as a clear
signal that the rate-cutting cycle was over, the bank
highlighted "the recovery of domestic activity."
August retail sales jumped 10.1 percent from the
year-earlier period, the IBGE added, more than the
9.1 percent median estimate in the Reuters poll of 22
Brazil's main gauge of retail sales excludes building
materials and automobiles, which had a sharp rise in August as
consumers rushed to car dealers to take benefit of a tax break
expected to expire at the end of that month.
Taking into account automobiles and building material,
retail sales in Brazil rose 2.7 percent from July and 15.7
percent from the same month a year before.
Sales of furniture and appliances bolstered the August rise,
growing 2.5 percent from July, while sales of personal items
like jewelry and sporting goods rose 2.3 percent in the month.
President Dilma Rousseff announced in August an extension of
tax breaks on locally made cars and home appliances as part of a
flurry of measures to boost demand and support local factories.